NEW YORK — Self-service
kiosks in hotel lobbies, which let travelers bypass the front desk at check-in,
will eventually help hotels stem rising labor costs by enabling them to serve
guests with fewer staff.

Testing the waters: Embassy Suites
Hotel, part of the Hilton Hotel chain, is currently using kiosks in six
of its properties.

Marriott International
will roll out the kiosks this summer, allowing guests to check in, get
key cards and check out without interacting with hotel staff.

"Eventually, the kiosks will
likely result in some cuts at the front desk," J.W. Marriott Jr., chairman
and chief executive officers, aid in an interview at a Marriott conference
of general managers last week in Orlando.

Marriott's kiosks, initially
planned for urban, full-service hotels, also allow customers to change rooms,
beds and length of stay. And, the kiosks are designed to be compatible with
a system that would let air travelers print boarding passes while checking
out of their hotel.

Hilton was the first
to launch the kiosks early last year. With 102 kiosks in 42 hotels, they
have so far been "very successful," Hilton spokeswoman Kathy Shepard said.

"We plan to put 120 kiosks
in an additional 100 hotels this year," she said, adding that they would be
at the Hilton and Doubletree brands.

Hotels have been introducing
self-service check-in in large, urban areas that cater to business travelers,
already comfortable with the convenience of express checkout. "Clearly the
business traveler is an earlier adapter of self service," said Tom Conophy,
chief technical officer at Starwood Hotels & Resorts Worldwide, whose
brands include Sheraton, Westin, St. Regis and W Hotels.

Starwood, which placed some
kiosks at its Sheraton properties in 2004, is planning to have more
in place at 100 Sheraton hotels in North America by the end of this year.

Even though the kiosks are
not intended to replace the front desk, "it is possible they will lead to
some labor cost savings over time," Conophy said. "It would depend on overall
adaptation to the kiosk technology."

If front desk staffing is
cut back, those employees will likely be "repurposed" into serving guests
in other ways, Conophy said. "We would look at staff we have now take on different
roles, such as lobby ambassadors."

Labor has been a growing
issue for large U.S. hotels, many of which have faced protracted labor disputes
from unions pressing for higher wages, better working conditions, shorter
contracts and better healthcare benefits.

While union activities have
failed to put a damper on a strong profit recovery in the hospitality industry,
wage increases are looming as one of the biggest challenges facing hotels
in the coming year.

Labor makes up 45% of hotel
operating expenses, according to the Atlanta office of hospitality consultants
PKF Consulting.

Expenses — payrolls, benefits
and training — are rising faster than inflation rates, PKF said, with labor
costs per available room climbing to an estimated $13,834 in 2004 from $12,540
in 2002.

At the Orlando conference,
Chief Executive J.W. Marriott, Jr. called labor and utilities "dark clouds"
over the industry.

Deutsche Bank lodging analyst
Marc Falcone, who recently named higher labor rates the "biggest single risk
to hotel stocks," says the kiosks will have little impact on unions in the
near future.

"My guess is that the union
could use it as a negotiating point for job security and wage rate, but not
in the near term," he said in an interview.

Beverly Hills, California-based
Hilton is the only U.S. chain to have an airport kiosk, at Honolulu International,
where travelers can check into their hotel room while waiting to collect luggage.

"We picked Honolulu because
it's mainly leisure travelers," Shepard said. "Which usually means they have
a lot of bags, and they've had to check them."

And the Hilton hotel at Chicago's
O'Hare airport has an American Airlines kiosk in its lobby, allowing passengers
to check in and get their boarding passes.

Marriott International is
also considering other services for its kiosks, such as ordering room service,
setting up a wake-up call, making restaurant reservations, booking a car or
printing a map to the guest's next destination.